Mark LaPedus

EE Times

(03/29/2006 2:29 PM EST)

SAN JOSE, Calif. — Intel Corp., Micron Technology Inc. and SanDisk Corp. were among the 11 companies that made a bid to acquire Lexar Media Inc., according to a new report, which also indicated that SanDisk is still in the bidding picture.

As reported, semiconductor maker Micron (Boise, Ida.) announced plans to acquire flash-memory product maker Lexar (Fremont, Calif.) for $680 million.

There were also reportedly 10 other companies that made separate bids to acquire Lexar. Intel (Santa Clara, Calif.), for one, also made a bid to acquire Lexar, but the chip giant is said to have “backed out,” said Satya Chillara, an analyst with American Technology Research Inc., in the report issued on Wednesday (March 29).

Flash-memory product rival SanDisk also made a bid to acquire Lexar for $8.75 a share, Chillara said in the report. In comparison, Micron’s bid for Lexar is said to be $8.11 a share, the analyst said.

“We believe SanDisk was interested in the IP portion of Lexar,” he said, noting that this particular deal could face some problematic regulatory issues. The combination of SanDisk and Lexar would hold 50-to-55 percent market share for flash cards, USB drives and other products in the United States, according to the analyst.

SanDisk apparently did not pursue its original offer for Lexar, but the market is now “anticipating another offer from SanDisk or another third party,” according to the analyst. “If SanDisk were to sweeten the deal, it could force Lexar to reconsider.”

Indeed, there is mounting pressure for Lexar to look at other bids. Several investment firms, including billionaire financier Carl Icahn, are attempting to block Micron’s proposed $680 million deal to acquire Lexar.

The investment firms are reportedly putting pressure on Lexar to find a better suitor. Micron’s bid for Lexar is too low, according to the firms. But so far, a new bidder has not apparently surfaced, giving Micron the upper hand in the deal, according to reports.